What is the overhead cost assigned to Product O7 under activity-based costing?
A)$32,129
B)$36,289
C)$4,160
D)$47,000

Question

Quizplus · Accepted Answer

The activity-based costing assigns overhead cost based on the cost drivers of each activity. Using the data given in the table, we can calculate the total cost of each activity for Product O7 as follows:

Activity 1: 2,500 x $9 = $22,500
Activity 2: 1,000 x $47 = $47,000
Activity 3: 800 x $9 = $7,200

Therefore, the total overhead cost assigned to Product O7 is $22,500 + $47,000 + $7,200 = $76,700.

To find the overhead cost assigned to Product O7, we need to divide this total by the number of units produced:

$76,700/ 2,500 = $30.68 per unit

Therefore, the overhead cost assigned to Product O7 is $30.68 x 1,050 units = $32,139.

Therefore, the best choice is B.

What Is the Overhead Cost Assigned to Product O7 Under